V.5. Approve the Joint Powers Agreement (JPA) with the St. Paul Authority to Administer and Manage the Property Assessed Clean Energy (PACE) Program
October 21, 2014 Council Report 2014-053
PROPERTY ASSESSED CLEAN ENERGY (PACE) PROGRAM
JOINT POWERS AGREEMENT WITH THE ST. PAUL PORT AUTHORITY
Proposed Action
Staff recommends approval of the following motion: Move to approve the Joint Powers
Agreement (JPA) with the St. Paul Port Authority to administer and manage the
Property Assessed Clean Energy (PACE) Program.
Overview
The PACE Program is a financing option supporting clean energy efficient and
renewable energy improvements for businesses, non-profits, religious institutions and
residential multi-unit properties. The PACE Program allows local governments to bond
for revenue to loan to property owners to make energy improvements to their properties.
The loans are then paid back through special assessments on the property over time.
The JPA with the St. Paul Port Authority provides cities with funding resources that were
secured to support the PACE Program and eliminates the need for cities to bond for
lending dollars. By signing the JPA, the City agrees to let the St. Paul Port Authority
administer and manage the PACE Program, with City approval of property owner
petitions to add a special tax assessment on property taxes. A 0.5 percent
administration fee is built into the interest rates, which are generally less than 5 percent.
Primary Issues to Consider
Low risk for City
Elimination of need to bond
Benefit to City Businesses and Institutions
Supporting Documents
Joint Powers Agreement
______________________________
Addison Vang
Economic Development Intern
Financial Impact: $___N/A____Budgeted: Y/N _N_ Source: __________
Related Documents (CIP, ERP, etc.): _______________________________________
Notes:
_______________________________________________________________
Council Report 14-053
Page 2
Analysis of the Primary Issues
By signing the JPA with the St. Paul Port Authority, the City agrees on a joint
partnership with the St. Paul Port Authority where they manage all aspects of the PACE
Program while providing financing options for clean energy efficient and renewable
energy for local businesses and multi-unit property owners. The administrative
responsibilities of the City are approval of property owner petitions to add a special tax
assessment to property taxes and collection of payment forwarded to the St. Paul Port
Authority. The JPA is a low risk, high reward partnership with the St. Paul Port Authority
that the City may opt-out from without penalty. Edina was the first city in Minnesota to
create a PACE Program, but has since signed the JPA to access the secured funding
source and low risk agreement. To date, 12 cities and counties have signed the JPA
with the Saint Paul Port Authority, with 11 more working towards signing the contract.
Comment \[m1\]:
This is where you list the
attachments to the report. In this case it will be the
Alternatives
JPA Agreement itself. Delete everything else.
The Council has the following alternatives:
Grant approval to sign JPA with the St. Paul Port Authority to administer and
manage the PACE Program.
Deny approval to sign JPA with the St. Paul Port Authority and elect not
participate in the PACE Program.
Deny approval to sign JPA with the St. Paul Port Authority and forego the PACE
program.
Port Authority of the City of Saint Paul
Property Assessed Clean Energy Program
(PACE OF MN)
JOINT POWERS AGREEMENT
Saint Paul Port Authority
850 Lawson Commons
380 St. Peter Street
Saint Paul, MN 55102
(651) 224-5686
(651) 223-5198 (fax)
www.sppa.com
REV 10/21/2013
Revised 09/15/2014
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JOINT POWERS AGREEMENT
This Agreement, made and entered into as of the _____ day of _____________, 20__, by
and between the Port Authority of the City of Saint Paul (the “Port Authority”), a body corporate
and politic, and the City of ___________, Minnesota, a municipal corporation (the “City”),
provides as follows:
WHEREAS, the Port Authority has been engaged in governmental programs for
providing financing in the City of Saint Paul and in other areas of the State of Minnesota (the
“State”) by making loans evidenced by various financing leases and loan agreements, and in the
process of operating these programs the Port Authority has developed a high degree of financial
expertise and strength; and
WHEREAS, Minnesota Statutes, Sections 216C.435 and 216C.436 and Chapter 429 and
471.59 (collectively the “Act”) authorize the City to provide for the financing of the acquisition
and construction or installation of energy efficiency and conservation improvements (the “Cost
Effective Energy Improvements” as defined in the Act or “Improvements”) on Qualifying Real
Properties” as defined in the Act (the “Properties” or “Property”) located within the boundaries
of the City through the use of special assessments; and
WHEREAS, the Act authorizes the City to designate a local government unit other than
the City to implement the program under the Act on behalf of the City; and
WHEREAS, the City has one or more projects within the boundaries of the City that have
Improvements in need of financing, and has adopted its Resolution No. _______ (a copy of
which is attached hereto as Exhibit A) to designate the Port Authority to implement and
administer a program on behalf of the City to finance such Improvements; and
WHEREAS, the Port Authority has created a program under the Act known as the
Property Assessed Clean Energy Program (“PACE OF MN”) for purposes of implementing and
administering the activities described in the Act, and the Port Authority is willing to implement
and administer that program on behalf of the City as requested herein; and
WHEREAS, the City has expressed a desire to make energy improvement financing
programs of the kind managed by the Port Authority available for improvements of eligible
properties within its boundaries, including but not limited to the Energy Savings Partnership,
Trillion BTU (within the portion of the City served by Xcel Energy) and PACE OF MN, and a
joint powers agreement is required between the City and the Port Authority for PACE OF MN;
and
WHEREAS, the Improvements will serve citizens of the City of Saint Paul and the City
of ___________, as well as Ramsey and ____________ Counties and the State of Minnesota.
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NOW THEREFORE, in consideration of the mutual covenants herein made, the parties to
this Agreement hereby agree as follows:
1. The Port Authority will exercise the powers of the Act on behalf of the City by
utilizing to provide financing for Improvements located within the boundaries of the City.
Except as otherwise provided in this Joint Powers Agreement, the Port Authority shall be solely
responsible for the implementation and administration of PACE OF MN and the financing of the
Improvements.
2. In connection with its implementation and administration of PACE OF MN, and
its financing of the Improvements located within the boundaries of the City, it is anticipated that
the Port Authority will enter into various agreements with persons wishing to obtain financing
for Improvements located within the boundaries of the City as well as with sources of financing
for such Improvements (collectively the “Program Documents”).
3. The Port Authority will charge a fee for its implementation and administration of
PACE OF MN, which fee will be described in, and payable under, the Program Documents.
4. The Port Authority will have the sole duty and responsibility to comply with or
enforce covenants and agreements contained in the Program Documents. This power
specifically includes the responsibility for monitoring and enforcing compliance with the
provisions of the Program Documents.
5. The source of funds to finance the Improvements will be either financing from a
designated lending institution’s (the “Lender”) using its own financial resources (the “Loan”) or
a taxable special assessment revenue bond(s) (the “Bond(s)”) issued by the Port Authority in
favor of the Lender. Under either financing mechanism, the Lender will advance funds under the
Program Documents to be paid from levied special assessments.
6. The Loan(s) or Bond(s) must be a special/limited obligation of the Port Authority,
payable solely from special assessments levied by the City as provided herein. The Loan(s) or
Bond(s) and interest thereon must neither constitute nor give rise to a general indebtedness or
pecuniary liability, or a general or moral obligation, or a pledge or loan of credit of the Port
Authority, the City, the City of Saint Paul or the State of Minnesota, within the meaning of any
constitutional or statutory provision. To that end, the Port Authority hereby agrees to indemnify
and hold harmless the City from and against any claims or losses arising out of the failure of the
Port Authority to provide for the payment of principal of, and the interest or any premium on the
Loan(s) or Bond(s), from special assessment payments actually paid to the Port Authority by the
City. This indemnity must not, however, be construed to relate to any claims or losses which
might arise by virtue of the exercise, by the City, of its governmental powers in connection with
the Project, or by virtue of the failure of the City to levy and collect special assessments with
respect to the Improvements or promptly remit such special assessment payments to the Port
Authority as provided in the Program Documents.
7. As and for its contribution to the financing of the Improvements, and as provided
in the Act, the City must impose and collect special assessments necessary to pay debt service on
that portion of the Loan(s) or Bond(s) attributable to the Improvements located within the
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boundaries of the City. Evidence that the City has imposed such special assessments is a
precondition to the Port Authority’s obligation to provide financing to any Improvements located
within the boundaries of the City in accordance with the following process:
A. The Port shall provide to City an application from an Applicant under the
Program which includes the following documentation:
1) A copy of the Application containing the legal name of the Applicant, its
legal status, its legal address, a description of the Project, the cost of the
Improvements, the total amount to be assessed against the Property and the
address, legal description and tax identification code for the Property upon which
the Improvements are to be constructed or installed.
2) A statement from the Port that the proposed Project as described in the
Application qualifies under the requirements of the Act and the Port Authority.
3) A fully-executed copy of the Applicant’s Petition and Assessment
Agreement suitable for evidencing, and recording if necessary, Applicant’s
agreement to be assessed for the amount of the Improvements.
B. Upon receipt of the documentation described in Subparagraph A above, City
agrees that it will levy an assessment against the Property for the amount to be assessed
as set forth in Section 7.A. above.
C. Evidence that the City has imposed such special assessments is a precondition to
the Port Authority’s obligation to provide financing to any Improvements located within
the boundaries of the City.
D. In the event that, after the City levies an assessment against the Property for the
costs of the Improvements and related costs as provided for in Subparagraph B above, the
Port does not fund the cost of the Improvements as contemplated by this Agreement, the
Port shall promptly notify City that it has not and will not fund the costs of the
Improvements under the Program and City shall thereafter the St. Louis County Auditor
to remove the subject assessment from the Property.
8. Once the City has imposed special assessments to finance Improvements located
within the boundaries of the City, the City transfer all collections of the assessments received by
it upon receipt to the Port Authority for application to the payment of the applicable Loan(s) or
Bond(s). The City will take all actions permitted by law for the recovery of the assessments,
including without limitation, reinstating the outstanding balance of assessments when the land
returns to private ownership, in accordance with Minn. Stat. Section 429.071, Subd. 4. The City
acknowledges that the Lender is a third-party beneficiary of the City’s covenants herein with
respect to the imposition and transfer of special assessments described herein.
9. Unless otherwise provided by concurrent action of the Port Authority and the
City, this Agreement will terminate upon the retirement or defeasance of all Loan(s) or Bond(s),
and this Agreement may not be terminated in advance of such retirement or defeasance.
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10. This Agreement may be amended by the Port Authority and the City, at any time,
by an instrument executed by both of them. The Port Authority or the City may not amend this
Agreement, however, if the effect of the amendment would impair the rights of the holder of the
Loan(s) or Bond(s), unless the holder has consented to the amendment.
11. This Agreement may be executed in any number of counterparts, each of which
when taken together will constitute a single agreement.
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IN WITNESS WHEREOF, the Port Authority and the City have caused this Agreement
to be executed on their behalf, by their duly authorized officers, as of the day and year first above
written.
PORT AUTHORITY OF THE
CITY OF SAINT PAUL
By:
Its: President
By:
Its: Chief Financial Officer
CITY OF ____________________, MINNESOTA
By:
Its:
By:
Its:
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Joint Powers Agreement
EXHIBIT A
Extract of Minutes of Meeting of the
City Council of the City of _______________, Minnesota
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City
of _______________ (the “City”), was duly held at the City Hall in the City, on ________,
______, 20____, at _________________P.M.
The following members were present:
and the following were absent:
* * * * * * * * *
The Mayor announced that the next order of business was consideration of the
designation of the Port Authority of the City of Saint Paul to implement and administer a
program under Minnesota Statutes, Sections 216C.435 and 216C.436 and Chapter 429 and
471.59 on behalf of the City.
Member ____________________ introduced the following resolution and moved its
adoption, the reading of which had been dispensed with by unanimous consent:
RESOLUTION NO. _______
RESOLUTION DESIGNATING THE PORT AUTHORITY TO
IMPLEMENT AND ADMINISTER A PROJECT ASSESSED
CLEAN ENERGY IMPROVEMENT FINANCING ON BEHALF
OF THE CITY, AND PROVIDING FOR THE IMPOSITION OF
SPECIAL ASSESSMENTS AS NEEDED IN CONNECTION
WITH THAT PROGRAM
BE IT RESOLVED
by the City Council of the City of _______________ (the “City”),
as follows:
Port Authority
1. The Port Authority of the City of Saint Paul (the “”) has
PACE OF MN
established the Property Assessed Clean Energy Program (“”) to finance the
acquisition and construction or installation of energy efficiency and conservation improvements
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Improvements
(the “”), on properties located throughout the State of Minnesota through the use
of special assessments pursuant to Minnesota Statutes Sections 216C.435 and 216C.436 and
Chapter 429 and 471.59 (the “Act”).
2. The City has received and approved one or more applications and petitions for
Special Assessments from owners of property located in the City desiring to participate in and
receive financing pursuant to the Act.
3. In order to finance the Improvements, the City hereby determines that it is
beneficial to participate in PACE OF MN, and to designate the Port Authority as the
implementor and administrator of that program on behalf of the City for purposes of financing
Improvements located within the City.
4. The City understands that the Port Authority may obtain funding from designated
lending institutions or may issue its PACE OF MN special assessment revenue bond(s) to
finance the Improvements, and that the sole security for the loan(s) or bond(s) will be special
assessments imposed by the other cities participating in PACE OF MN.
5. To facilitate and encourage the financing of Improvements located within the
City, the City covenants to levy assessments for said Improvements on the property so
benefitted, in accordance with the Application and Petition for Special Assessments received
from the owner(s) of the Property and approved by the Port Authority. The interest rate on the
Special Assessments shall be the interest rate on the Loan(s) or Bond(s), and may include
additional interest.
6. After imposition of the special assessments, the City shall collect such
assessments and remit them to the Port Authority for use in the repayment of the Loan(s) or
Bond(s).The City will take all actions permitted by law to recover the assessments, including
without limitation, reinstating the outstanding balance of assessments when the land returns to
private ownership, in accordance with Minn. Stat. Section 429.071, Subd. 4.
7. The Mayor and City Clerk are authorized to execute on behalf of the City, any
documents, certificates or agreements necessary to implement the program authorized by this
resolution.
The motion for the adoption of the foregoing resolution was duly seconded by Member
______________ upon vote being taken thereon the following voted in favor thereof:
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
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STATE OF MINNESOTA )
COUNTY OF _____________ ) SS.
CITY OF ____________ )
I, the undersigned, being the duly qualified and acting City Clerk of the City of
____________________, hereby certify that I have carefully compared the attached and
foregoing extract of minutes of a meeting of the City Council of said City held
_______________, with the original thereof on file and of record in my office and the same is a
full, true and complete transcript therefrom.
WITNESS
My hand officially and the seal of the City this ___________ of
______________.
__________________________________________
City Clerk
City of _________________
(Seal)
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RESOLUTION NO. 2014-053
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION DESIGNATING THE PORT AUTHORITY TO IMPLEMENT AND
ADMINISTER A PROJECT ASSESSED CLEAN ENERGY IMPROVEMENT
FINANCING ON BEHALF OF THE CITY, AND PROVIDING FOR THE IMPOSITION
OF SPECIAL ASSESSMENTS AS NEEDED IN CONNECTION WITH THAT
PROGRAM
WHEREASPort Authority
, the Port Authority of the City of Saint Paul (the “”) has
PACE OF MN
established the Property Assessed Clean Energy Program (“”) to finance the
acquisition and construction or installation of energy efficiency and conservation improvements
Improvements
(the “”), on properties located throughout the State of Minnesota through the use
of special assessments pursuant to Minnesota Statutes Sections 216C.435 and 216C.436 and
Chapter 429 and 471.59 (the “Act”).
WHEREAS
, in order to finance the Improvements, the City hereby determines that it is
beneficial to participate in PACE OF MN, and to designate the Port Authority as the
implementer and administrator of that program on behalf of the City for purposes of financing
Improvements located within the City.
WHEREAS
, the City understands that the Port Authority may obtain funding from
designated lending institutions or may issue its PACE OF MN special assessment revenue
bond(s) to finance the Improvements, and that the sole security for the loan(s) or bond(s) will be
special assessments imposed by cities participating in PACE OF MN.
WHEREAS
, to facilitate and encourage the financing of Improvements located within
the City, the City covenants to levy assessments for said Improvements on the property so
benefitted, in accordance with the Application and Petition for Special Assessments received
from the owner(s) of the Property and approved by the Port Authority. The interest rate on the
Special Assessments shall be the interest rate on the Loan(s) or Bond(s), and may include
additional interest.
WHEREAS
, after imposition of the special assessments, the City shall collect such
assessments and remit them to the Port Authority for use in the repayment of the Loan(s) or
Bond(s).The City will take all actions permitted by law to recover the assessments, including
without limitation, reinstating the outstanding balance of assessments when the land returns to
private ownership, in accordance with Minn. Stat. Section 429.071, Subd. 4.
NOW, THEREFORE, BE IT RESOLVED
that, after appropriate examination and due
consideration, the governing body of the City approves the City’s participation in PACE OF MN
and authorizes The Mayor and City Clerk to execute on behalf of the City, any documents,
certificates or agreements necessary to implement the program authorized by this resolution.
st
Adopted by the City Council of the City of Hopkins this 21 day of October, 2014.
By: ___________________________
Eugene J. Maxwell, Mayor
ATTEST:
_______________________________
Amy Domeier, City Clerk